British Columbia has recently issued a new bulletin, PST 123 “Graphic Designers” to clarify how Provincial Sales Tax (“PST”) applies to their businesses. Similar to other services, design services are generally not subject to PST. However, PST may apply if graphic designs are provided in a tangible format (e.g., USB drive, memory card, CD or DVD). Intangible formats (e.g., by email, FTP, download or other electronic means) are generally not taxable for PST.
Specific rules apply for goods sold or leased as a result of design services. Where the sale of goods is optional, PST applies only to the charge for the goods, not to the charge for the design services. However, where the sale of goods is not optional, PST applies to the total charge, including design services and goods. Goods sold independent of design services remain taxable for PST purposes.